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Monday 22 September, 2014

Aldermore Bank

Announcement of Intention to Float

RNS Number : 1950S
Aldermore Bank
22 September 2014
 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, CANADA, JAPAN, SOUTH AFRICA OR AUSTRALIA OR ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

 

This announcement is an advertisement for the purposes of the UK Prospectus Rules and not a prospectus and not an offer of securities for sale in any jurisdiction, including in or into the United States, Canada, Japan, South Africa or Australia. Investors should not purchase or subscribe for any shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") expected to be published by Aldermore Group plc in due course in connection with the proposed admission of its ordinary shares to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the main market of the London Stock Exchange. A copy of the Prospectus will, following publication, be available for inspection from Aldermore Group plc's website at www.investors.aldermore.co.uk. This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States or in any other jurisdiction.

 

 

For immediate release

22 September 2014

 

AC Acquisitions Limited

 

Announcement of Intention to Float on the London Stock Exchange

Announcement of summary IFRS financial results for the six months ended 30 June 2014

Appointment of new Non-Executive Directors

 

 

Aldermore today announces its intention to proceed with an initial public offering (the "IPO" or the "Offer") of the shares of Aldermore Group plc, following the proposed re-registration of AC Acquisitions Limited as a public limited company and its change of name to Aldermore Group plc  (the "Company" or "Aldermore"). Aldermore intends to apply for admission of the Company's ordinary shares (the "Shares") to the premium listing segment of the Official List of the Financial Conduct Authority (the "FCA") and to trading on the main market for listed securities of the London Stock Exchange (together "Admission"). The Offer will comprise an offer of new and existing Shares to institutional investors.

 

Aldermore also announces its summary half-year IFRS results for the six months ended 30 June 2014. In addition, Peter Shaw and Neil Cochrane are appointed Non-Executive Directors on the Aldermore Board, having secured the required regulatory approvals. The Company is expecting to appoint one additional non-executive director prior to Admission who will be the Senior Independent Director. The appointment terms have been agreed and the appointment is subject only to final approval from the PRA.

 

Aldermore is a British bank which focuses on specialist lending to SMEs and homeowners across four targeted lending segments which its directors have identified as being underserved by incumbent banks and where they believe there are significant, sustainable and profitable growth opportunities. Aldermore's targeted lending segments are: Asset Finance, Invoice Finance, SME Commercial Mortgages and Residential Mortgages. Aldermore is funded predominantly through online retail and SME deposits.

 

Aldermore has a proven track record of execution and delivery. At its foundation in May 2009, Aldermore had customer lending in the region of £76m and approximately 50 employees. Since then, Aldermore has developed into a multi-product asset-based lender and through its focus on organic loan origination has grown significantly, having £4.8bn of assets, approximately 160,000 customers and over 800 employees as at 30 June 2014.

 

Aldermore is a "legacy-free" bank. It employs a modern digital platform to support its customer service proposition and provide a scalable, efficient operating model. Aldermore has a strong and diversified online deposit franchise and its targeted lending segments provide a significant and sustainable organic growth opportunity.

 

Highlights

 

·     Profitable organic growth: profit before tax of £18.6m for the six months ended 30 June 2014, an increase of 249% on the profit before tax of £5.3m for the first half of 2013. This translates into a return on equity of 10.4% on an annualised basis (11.7% excluding IPO costs) which compares with 5.5% for the same period in 2013. The Company is targeting a return on equity of approximately 20% by the end of 2017;

 

·     Significant growth in net lending: as at 30 June 2014 Aldermore had total net loans of £4.0bn (31 December 2013: £3.4bn) of which £2.0bn is lent to SMEs and £2.0bn is lent to homeowners.  Net loans to customers have grown at a compound annual growth rate of 64% since 2011 and Aldermore expects nominal growth in net loans in line with current run rates;

 

·     Driven by organic origination: Gross organic origination volumes have increased from £347m for the first six months of 2011 to £1,041m for the first six months of 2014, equivalent to a compound annual growth rate of 44% and since the beginning of 2011, 98% of loan origination has been organically generated;

 

·     Strong distribution base, offering superior customer service and flexible products: Aldermore does not have a traditional branch network and as such does not have the significant costs associated with running such a branch network. Lending originations are conducted primarily through intermediaries with increasing direct distribution online, by phone and in person through Aldermore's regional offices across Great Britain which also provide product expertise, customer services and operational support services;

 

·     Attractive margins underpinned by consistent, clearly defined credit risk management: Aldermore's attractive margins are underpinned by consistent credit risk management. The vast majority of Aldermore's balance sheet is secured against a high proportion of tangible asset collateral and across its four targeted lending segments, it has low levels of non-performing loans;

 

·     Declining funding costs driven by diversification of funding sources: Aldermore has a stable funding base which is predominantly funded by online retail and SME deposits with a loan-to-deposit ratio of 104% as at 30 June 2014. Further diversification of funding is provided by the RMBS issuance in April 2014 and Aldermore's participation in the Funding for Lending Scheme;

 

·     Award-winning online deposit franchise: which has grown to £3.9bn as at 30 June 2014 (31 December 2013: £3.5bn) growing at a compound annual growth rate of 52% since 2011;

 

 

·     Scalable and efficient, legacy-free digital operating model: Aldermore employs modern, onshore IT infrastructure composed of industry-standard systems that are configured to Aldermore's requirements and is scalable such that it can expand to support predicted future growth with moderate ongoing investment. Aldermore is targeting a cost/income ratio of around 40% by the end of 2017;

 

·     Strong capital base and liquidity: as at 30 June 2014, Aldermore had a fully loaded CRD IV CET 1 ratio of 10.9%, a Total Capital Ratio of 12.7% and a Leverage Ratio of 5.0%. Similarly, Aldermore maintains strong levels of liquidity. In addition, the Company aims to raise at IPO c£75m of gross proceeds to support the medium term growth of the business. Post IPO, the Company is targeting a fully loaded CRD IV CET 1 ratio in excess of 11%;

 

·     Experienced management team: the senior management team, led by Chief Executive Officer, Phillip Monks, combines extensive experience of bank operations and governance with the entrepreneurial approach that drives the Company's strategy.

 

Phillip Monks, Chief Executive Officer, commented:

 

"Aldermore is a modern, legacy-free bank that challenges the established view on what banking should be. We deliver straightforward products and sector expertise to customers in underserved market segments that offer attractive risk-adjusted returns. Our offering benefits from modern digital infrastructure and proven distribution channels and is underpinned by a diversified funding base and robust capital position."

 

"Now in our sixth year of growth, becoming a public company is the natural next step in Aldermore's evolution and positions us for the next stage of our development through greater access to the capital markets and enhanced profile for our brand."

 

Details of the Offer

 

·     Aldermore intends to apply for admission of the Company's Shares to the premium listing segment of the Official List of the FCA and to trading on the main market for listed securities of the London Stock Exchange.

 

·     The Offer will comprise an offer of Shares: (i) to certain institutional investors in the United Kingdom and elsewhere outside the United States; and (ii) in the United States only to qualified institutional buyers in reliance on an exemption from the registration requirements of the United States Securities Act of 1933, as amended.

 

·     The Offer will comprise an offer of new Shares to be issued by the Company to raise gross proceeds of approximately £75m. The net proceeds from the Offer receivable by the Company will be used to support the medium term growth of the business.

 

·     The Offer will also comprise a sale by AnaCap Financial Partners LP, AnaCap Financial Partners II LP, AnaCap Derby Co-Investment (No.1) LP and AnaCap Derby Co-Investment (No.2) LP (together "AnaCap"), certain other shareholders and members of the Company's senior management team (the "Selling Shareholders") of a portion of their existing holding of Shares.

 

·     Each of the Company, its directors and members of senior management team, AnaCap and certain other Selling Shareholders will agree to lock-up arrangements in respect of their remaining holdings of Shares for specified periods of time following Admission.

 

·     Immediately following completion of the Offer, it is expected that the Company will have a free float of at least 25% of the issued share capital of the Company.

 

·     Funds controlled by Toscafund Asset Management LLP and Lansdowne Partners (UK) LLP intend to increase their respective shareholding in Aldermore through the IPO offering from their existing combined 8.3% shareholdings.

 

·     It is expected that Admission will take place in October 2014 and that, following Admission, the Company will be eligible for inclusion in the FTSE UK indices.

 

·     In relation to the Offer and Admission, Credit Suisse Securities (Europe) Limited ("Credit Suisse") and Deutsche Bank AG, London Branch ("Deutsche Bank") are acting as Joint Global Co-ordinators and Joint Bookrunners. Deutsche Bank is acting as Sponsor. Nomura International Plc ("Nomura") and Numis Securities Limited ("Numis") are acting as Co-Lead Managers. Lazard & Co., Limited ("Lazard") is acting as Financial Adviser to the Company and AnaCap.

 

·     Full details of the Offer will be included in the Prospectus, expected to be published in due course.

 

Dividend Policy

 

Aldermore does not intend to pay a dividend in the near term but will consider subject to, inter alia, available distributable reserves, paying an initial dividend from 2017, taking into account the growth opportunities available to Aldermore at the time.

 

The Board intends to review, on an ongoing basis, Aldermore's dividend policy including any dividend payments in the context of progress on delivery of Aldermore's strategy, regulatory capital requirements and the broader operating environment.

 

 

Summary Financial Results for the Six Months ended 30 June 20141

 

Lending to customers passes £4bn mark

·     Total Net Loans up by 19% to £4.0bn (31 December 2013: £3.4bn)

·     Loans to SMEs up by 16% to £2.0bn (31 December 2013: £1.7bn)

·     Lending to homeowners up by 21% to £2.0bn (31 December 2013: £1.7bn)

·     Organic origination up by 50% to £1.0bn (H1 2013: £0.7bn)

 

Continued growth in online deposit franchise

·     Customer deposits up by 11% to £3.9bn (31 December 2013: £3.5bn)

·     SME deposits growth of 51% to £0.8bn (31 December 2013: £0.5bn)

·     Loan-to-deposit ratio of 104% (31 December 2013: 97%)

 

Profit before tax more than tripled

·     Profit before tax up by 249% to £18.6m (H1 2013: £5.3m)

·     Return on equity of 11.7% excluding IPO costs (H1 2013: 5.5% and FY 2013: 11.6%)

 

 

Cost/income ratio of 64% excluding IPO costs (H1 2013: 77%)

·     H1 2014 operating expenses include pre-tax IPO costs of c£2.2m

·     Also included in H1 2014 pre-tax operating expenses are a full year's charge of c£2.6m relating to the Financial Services Compensation Scheme levy and a c£1m non-recoverable VAT adjustment which is not expected to repeat

 

Delivering against strategic objectives

·     Successfully issued c£333m of prime AAA RMBS in April 2014 to further diversify funding base

·     Fully loaded CRD IV CET 1 ratio of 10.9% (31 December 2013: 12.1%)

 

 

Phillip Monks, Chief Executive Officer, commented:

 

"This has been an excellent six months for Aldermore as we continue to focus on providing attractive lending and savings products to UK SME and retail customers. We've again grown organically with our loan book up by 19% since the end of 2013 and loans to customers passing the £4bn mark. Our deposit business continues to attract customers and I'm particularly pleased by the 51% growth in our SME deposits which demonstrates our ability to deliver products which meet the needs of this underserved customer base."

 

"As we continue to leverage our operating base, we've more than tripled profit before tax, driving an £18.6m profit in the first six months of 2014 compared to £5.3m for the same period last year. Our cost/income ratio was 64% excluding costs relating to the IPO."

 

"Our first half results again demonstrate our ability to deliver growth and profitability and we announced today our intention to list on the London Stock Exchange. This is an important step in the Bank's development which will enable us to lend more to British SMEs and homeowners. As we enter this new and exciting stage, I'd like to thank all of our customers, employees and shareholders for their ongoing support." 

1 Summary Financial Results for the six months ended 30 June 2014 are prepared under IFRS. Comparatives for the six months ended 30 June 2013 are unaudited.  

 

Enquiries

Credit Suisse    

George Maddison

Stephen Carter

Nick Koemtzopoulos

+44 (0) 20 7888 8888

 

Deutsche Bank                                 

Nicholas Hunt

Inigo de Areilza

Claire Brooksby

+44 (0) 20 7545 8000

Lazard

William Rucker

Nick Millar

+44 (0) 20 7187 2000

 

 

 

 

 

FTI Consulting

Neil Doyle

[email protected]

+44 (0) 20 3727 1141

FTI Consulting

Paul Marriott

[email protected]

+44 (0) 20 3727 1341

 

 

Appendix

 

Overview of business

 

Aldermore focuses on specialist lending to SMEs and homeowners across four targeted lending segments which the Board have identified as being underserved by incumbent banks and where they believe there are significant, sustainable and profitable growth opportunities. Aldermore's lending activity is supported by its online deposit franchise and other sources of funding:

 

·     Asset Finance: Aldermore offers Asset Finance loans on single transactions of predominantly between £5,000 and £1m primarily to fund SME capital investment in certain key assets including plant and machinery, commercial vehicles, cars, IT equipment and business equipment. As at 30 June 2014, Aldermore's Asset Finance business had net loans of £871.1m, and an estimated 2.9% of the total UK Asset Finance market2;

 

·     Invoice Finance: Aldermore provides working capital for SMEs by lending against outstanding invoices issued by a borrower to its customers. Borrowers limits are set on a borrower specific basis and they typically operate with an advance rate of up to 85% of the value of the approved invoices. As at 30 June 2014, Aldermore's Invoice Finance business had net loans of £203.7m, which constituted an estimated 1.1% of the total UK Invoice Finance market2;

 

·     SME Commercial Mortgages: Aldermore offers SME Commercial Mortgages up to a maximum of £2m on a single property, rising to £5m over multiple properties, primarily to SMEs and professional property investors, secured on commercial property (including retail premises, offices, industrial units and warehouses) and professionally managed residential buy-to-let portfolios. As at 30 June 2014, it had net loans of £894.9m and an estimated 1.1% of the total UK SME Commercial Mortgage market2; and

 

·     Residential Mortgages: Aldermore offers Residential Mortgages up to £1m in the form of residential lending (owner-occupied mortgages) or buy-to let mortgages. As at 30 June 2014, it had net loans of £2.0bn and an estimated 0.5% of the total UK Residential Mortgage market2.

 

·     Funding: Aldermore is funded predominantly through online retail and SME savings accounts and as at 30 June 2014, had a loan-to-deposit ratio of 104%. Additional funding is provided by Aldermore's £333m RMBS issued in April 2014 (its first securitisation transaction), participation in the Funding for Lending Scheme (as at 30 June 2014, Aldermore had drawn £485m under the scheme of which £189m was on balance sheet funding) and £40m of subordinated notes. This increasingly diversified mix of funding has resulted in declining cost of funds. For the six months ended 30 June 2014, Aldermore's cost of funds was 2.3% compared to 2.8%, 3.9% and 3.7% for the financial years ended 31 December 2013, 2012 and 2011, respectively.

 

2 (a) Market size: Market size used for calculating Aldermore's market share based on annualised total market for H1 2014, except Invoice Finance which represents a stock figure as at period-end H1 2014. Data from: Finance & Leasing Association (Asset Finance); Asset Based Finance Association (Invoice Finance) and CML (Residential Mortgages). Market size for SME Commercial Mortgages based on H1 2013 DMU study. H1 2013 market origination annualised to give market size.

  (b) Market share: Aldermore's market share is based on H1 2014 origination for Asset Finance, SME Commercial Mortgages and Residential Mortgages. Market share for Invoice Finance based on H1 2014 period-end balance.

 

Key Strengths

 

·     Aldermore is a "legacy-free" British bank with a proven track record of execution and delivery: Aldermore's loan portfolio grew from £1.2bn as at 31 December 2011 to £3.4bn as at 31 December 2013 and £4.0bn as at 30 June 2014. Over the same period, its return on equity increased from (0.5)% for the financial year ended 31 December 2011 to 11.7% (excluding IPO costs) for the six months ended 30 June 2014. Founded in 2009, Aldermore has not experienced any significant "legacy" or systemic conduct issues and is not exposed to the "legacy" costs and uncertainty faced by some other banks.

 

·     Modern digital platform and strong distribution base supports superior customer service and flexible products: Aldermore's digital distribution model is at the heart of its service proposition. It supports approximately 14,000 intermediaries in addition to direct customers, enables responsive customer service and facilitates the growth of the business.

 

·     Aldermore's target lending markets provide a significant, sustainable and profitable growth opportunity: Aldermore focuses on specialist lending to SMEs and homeowners across four large targeted segments which its directors believe offer attractive risk-adjusted returns and growth opportunities.

 

·     Attractive margins underpinned by consistent, clearly defined credit risk management: Aldermore's attractive margins are underpinned by consistent credit risk management. The vast majority of Aldermore's balance sheet is secured against a high proportion of tangible asset collateral and across its four targeted lending segments, it has low levels of non-performing loans.

 

·     Strong online retail and SME deposits franchise as recognised by customers and the industry: As at 30 June 2014, Aldermore had attracted c114,000 retail and SME deposit customers with a simple proposition of delivering "great returns effortlessly". Its deposits increased from £1.4bn as at 31 December 2011 to £3.9bn as at 30 June 2014.

 

·     Leveraging scalable and efficient digital operating model: In order to support its operations, Aldermore employs modern, onshore IT infrastructure composed of industry-standard systems that are configured to Aldermore's requirements. This digital enabling infrastructure is highly scalable such that it can expand to support predicted future growth with moderate ongoing investment.

 

·     Declining funding costs driven by diversification of funding sources: Aldermore has a stable funding base which is predominantly funded by online retail and SME deposits. Further diversification of funding is provided by the RMBS issuance and Aldermore's participation in the Funding for Lending Scheme.

 

·     Strong capital base and liquidity: Aldermore has levels of capital which are in excess of the requirements set by the PRA. As at 30 June 2014, Aldermore had a fully loaded CRD IV CET1 Ratio of 10.9%, a Total Capital Ratio of 12.7% and a Leverage Ratio of 5.0%.  Similarly, Aldermore maintains strong levels of liquidity.

 

·     Experienced management team leading a motivated employee base: The senior management team, led by Chief Executive Officer, Phillip Monks, combines extensive experience of bank operations and governance with the entrepreneurial approach that drives the Company's strategy.

 

Strategy

Aldermore intends to continue with its successful strategy of providing customers with a reliable, expert, dynamic and straightforward banking service across targeted segments. The directors believe that by focussing on its existing model and the following strategic priorities, Aldermore can continue to take advantage of the significant growth opportunity available to it and deliver strong, sustainable risk-adjusted returns:

 

·     Continuing organic growth whilst maintaining rigorous credit standards: There are positive market dynamics in Aldermore's target market segments with resurgent business confidence, unfulfilled demand for SME lending and strong demand for mortgages. Against this background, Aldermore aims to further grow its net loans, expand its market share and seek value by utilising its expert manual underwriting (supported by efficient data-driven risk management systems), and take advantage of lending opportunities whilst maintaining rigorous credit standards. The Board believes that Aldermore can continue to grow its net loans and achieve attractive risk-adjusted returns. Aldermore expects nominal growth in net loans in line with current run rates. Furthermore, it aims to target a return on equity of around 20% by the end of 2017 and is targeting a cost/income ratio of around 40% by the end of 2017, whilst targeting a fully loaded CRD IV CET1 Ratio in excess of 11 per cent;

 

·     Further enhancing its customer value proposition: Aldermore provides expertise in each of its chosen customer and lending segments. Aldermore believes there is the opportunity to further enhance its proposition to provide a more holistic offering to customers, based upon their needs, in a number of other customer/industry segments. By deepening and broadening customer relationships, Aldermore aims to increase its cross-selling of products to customers;

 

·     Strengthening distribution channels including direct and existing relationships with intermediaries: Aldermore is undertaking a number of initiatives aimed at further strengthening its distribution channels across each of its targeted market segments;

 

·     Developing product franchise and continued product innovation: Aldermore has developed a strong suite of products in its chosen lending and savings segments and believes there are opportunities to extend this further whilst maintaining strong risk-adjusted returns;

 

·     Leveraging Aldermore's digital capability: The directors believe that leveraging Aldermore's modern digital capability is key to its future strategy. Aldermore aims to use its scalable digital platform in order to continue growing the size of its loan book and deposits whilst managing servicing costs. Aldermore believes its digital capability can be further leveraged to: (i) enable Aldermore to execute product innovation and proposition development in an efficient and cost effective manner, (ii) simplify the customer journey and "take the hassle" out of banking (further building customer advocacy and loyalty), (iii) identify more opportunities for cross-selling through innovative use of data, (iv) enhance process efficiency, and (v) deepen and extend credit understanding and insights.

 

Summary Financial Results for the Period Ending 30 June 2014

 

Key Performance Indicators

30 June        2014

31 December 2013

Movement

Loans to customers (£m)

4,009

3,374

19%

Customer deposits (£m)

3,859

3,464

11%

Fully loaded CRD IV CET 1 ratio (%)

10.9%

12.1%

(1.2)%






H1 2014

H1 2013

Movement

Organic loan originations (£m)

1,041

695

50%

Net interest margin (%)

3.3%

2.6%

0.7%

Cost/income ratio(1) (%)

64%

77%

(13)%

Profit before tax (£m)

18.6

5.3

249%

Return on equity(1) (%)

11.7%

5.5%

6.2%

 

Aldermore's Summary Financial Track Record

£m

30 June 2014

31 Dec 2013

31 Dec 2012

31 Dec 2011

Key balance sheet items





Net loans

4,009

3,374

2,057

1,157

Liquid assets(2)

707

786

449

383

Total assets

4,761

4,203

2,544

1,571

Deposits

3,859

3,464

2,162

1,359

RMBS

332

-

-

-

Funding for Lending Scheme

189

383

115

-

Other wholesale funding

36

36

35

-

Total liabilities

4,481

3,938

2,365

1,399

Shareholders' funds

280

265

179

172






Loan-to-deposit ratio (%)

104%

97%

95%

85%

Net loan growth (£m)

635

1,317

900

686

Fully loaded CRD IV CET1 ratio (%)

10.9%

12.1%

n/a

n/a

 

£m

6 months ending

30 June 2014

6 months ending   30 June 2013

Year ending           31 Dec 2013

Year ending           31 Dec 2012

Year ending  31 Dec 2011

Key P&L items






Net interest income

61.2

30.7

80.6

36.0

23.7

Operating income

73.9

43.1

108.3

57.9

43.1

Operating expenses

(49.3)

(33.1)

(71.2)

(52.2)

(41.8)

Pre-provision profit

24.5

10.0

37.2

5.7

1.3

Impairment losses on loans to customers

(5.9)

(4.7)

(11.5)

(5.4)

(2.0)

Profit before tax

18.6

5.3

25.7

0.3

(0.7)

Tax

(4.4)

(0.4)

-

0.9

-

Profit after tax

14.2

5.0

25.7

1.2

(0.7)







Net interest margin (%)

3.3%

2.6%

3.0%

2.2%

2.9%

Cost/income ratio(1) (%)

64%

77%

66%

90%

97%

Cost of risk

32bps

39bps

42bps

34bps

25bps

Return on Equity (1) (%)

11.7%

5.5%

11.6%

0.7%

(0.5)%

 

(1)        Excluding IPO related pre-tax costs of £2.2m for the first six months of 2014

(2)        Liquid assets includes cash and balances at central banks, loans and advances to banks and debt securities

Directors Biographies

 

Executive Directors

 

Phillip Monks - Chief Executive Officer

Phillip was part of the team which founded Aldermore in 2009 and has over 30 years' industry experience. Most recently, he established and obtained a banking licence for Europe Arab Bank where he was CEO until 2008. Prior to this, Phillip held senior roles within Barclays Bank plc, including Branch Director of Barclays Private Bank in Geneva, Director of Business and Corporate Banking in North West England, Managing Director of Barclays Corporate Banking in London, the Midlands and South East and, finally, CEO of Gerrard Investment Management from 2003 upon its acquisition by Barclays from Old Mutual plc.

 

James Mack - Chief Financial Officer

James joined Aldermore in June 2013 and is responsible for the Finance and Treasury functions. From 2010, he held a number of senior finance roles within the Co-operative Banking Group including Acting CFO, Director of Financial Control and Head of Financial Planning and Analysis. Prior to this, James spent six years with the Skipton Building Society and was instrumental in leading the merger with the Scarborough Building Society. James joined KPMG in 1993 and spent 11 years in their financial services practice.

 

Non-Executive Directors

 

Glyn Jones - Chairman

Glyn joined the Board as Chairman in March 2014. He is currently the Senior Independent Director on the board of Direct Line Insurance Group plc and, since May 2007, has been the Chairman of Aspen Insurance Holdings Limited, a New York listed specialty lines insurance and re-insurance business. Glyn was formerly the Chairman of Towry Holdings Limited between 2006 and 2011. He also served as Chairman of Hermes Fund Managers from 2008 to 2011 and was Chairman of the sister company BT Pension Scheme Management for a part of this period. Glyn was Chief Executive officer of the independent investment group, Thames River Capital, from 2005 to 2006. From 2000, he served as Chief Executive Officer of Gartmore Investment Management in the United Kingdom for four years. Prior to this, Glyn was chief executive officer of Coutts NatWest Group and Coutts Group, having joined in 1997. In 1991, Glyn joined Standard Chartered in Hong Kong where he became the General Manager of Global Private Banking. He was a consulting partner with Coopers & Lybrand/Deloitte Haskins & Sells Management Consultants from 1981 to 1990. Glyn is a graduate of Cambridge University and a Fellow of the Institute of Chartered Accountants in England & Wales.

 

John Callender - Independent Non-executive Director

John joined the Aldermore Board in May 2009 and chairs the Board Risk Committee. John is non-executive Chair of ANZ Bank Europe Ltd. He also holds non-executive director positions at Ford Credit Europe Plc, chairing the Board Risk committee and a member of the Audit Committee, as well as Motability Operations Plc, chairing the Remuneration Committee and a member of the Audit Committee. John is also a member of the Financial Conduct Authority Regulatory Decisions Committee which he was invited to join in 2013. Until recently, John also served for a number of years as a Governor of Reading Blue-Coat School in Sonning, Berkshire. Previously he was a senior executive in Barclays plc with considerable experience of operating in Europe, India and the USA running a number of Businesses including the Asset Finance, Leasing, Invoice Finance and Contract Hire operations. He served on the Board of the Finance and Leasing Trade Association for 6 years and was elected Chair for 1996/1997.

 

 

Peter Cartwright - Non-Executive Director

Peter's involvement with the Board dates back to the launch of Aldermore in May 2009. He is one of the founding partners of AnaCap Financial Partners LLP where he is also the Co-Managing Principal responsible for developing AnaCap's portfolio company investments. Prior to AnaCap, Peter was commercial director within a specialty insurance services provider backed by a UK-based private equity firm, and between 1999 and 2003 was Sales & Marketing Director and Operations Director for GMAC UK and On:line Finance, respectively, having previously worked for GE Capital. Peter is an experienced business builder and operational specialist and holds various non-executive and supervisory board roles within banks and financial services companies across Europe.

 

Neil Cochrane - Non-Executive Director

Neil joined the Board in September 2014. Neil's involvement with Aldermore dates back to May 2010, when he joined AnaCap Financial Partners LLP's Business Services team. This role saw Neil take responsibility for day-to-day interaction with senior management of AnaCap's portfolio companies on strategic and operational development. Neil is currently an investment director within the team. Neil brings eight years strategic financial services experience to this role. He started his career as a consultant at Oliver Wyman Financial Services in 2006 where he was involved in a broad range of projects for banking and insurance clients. His assignments covered clients in the UK, Europe and the U.S. and were predominately focused on new business launches, strategy development, M&A and risk management. Neil graduated from the University of Nottingham in 2006 with a BA (Hons) in Economics.

 

John Hitchins - Independent Non-Executive Director

John is an independent Non-Executive Director and chairs the Audit Committee. He was appointed to the Board in May 2014. He brings 36 years of experience in the audit arena, having spent his whole career at PricewaterhouseCoopers ("PwC"), including as an audit partner. John was formerly Chairman of the Banking Committee of the Institute of Chartered Accountants in England & Wales and a board member of the Institute's Financial Services Faculty. He has also served as a member of the Institute's Business Law Committee. During his career with PwC, John specialised in bank auditing and financial advisory services and his clients have included institutions such as Euroclear, Lloyds Banking Group, the Bank of England, Bank of Ireland, Britannia Building Society, Barclays, JP Morgan Chase and Nomura. Until recently, John was a member of the UK FCA Practitioner and Markets Practitioner Panels. He is currently a member of the Governing Council of the Centre for the Study of Financial Innovation, a not-for profit City based think tank. John is a graduate of Oxford University and a Fellow of the Institute of Chartered Accountants in England & Wales.

 

Peter Shaw - Independent Non-Executive Director

Peter joined the Board as an Independent Non-Executive Director in September 2014.  Peter brings over 30 years financial services experience to his new role, having spent most of his career at RBS NatWest. Joining NatWest as a graduate trainee in 1981, Peter worked across a number of business areas during his career with the group including retail, SME, private banking, corporate banking, HR and risk. Between 1994 and 2002, Peter was Managing Director of various group businesses offshore, based in Jersey. In 2002, Peter returned to the UK to become COO of the Risk Function at Group Head Office and between 2004 and 2010 Peter was Chief Risk Officer for various group businesses including RBS UK Retail, Wealth & Ulster Bank. Between May 2012 and January 2013, Peter acted as interim Chief Risk Officer for the Co-operative Banking Group.  Peter is currently also a non-executive director at Bank of Ireland UK PLC, where he is Chair of the bank's Risk Committee and a member of the Audit Committee. Peter graduated from London South Bank University in 1981 with a BA in Modern Languages. Peter holds an ACIB and DipFS. He is also a Fellow of the Chartered Institute of Bankers in Scotland.

 

Christopher Stamper - Independent Non-Executive Director

Chris is an Independent Non-Executive Director and was appointed to the Board in February 2014. He brings 35 years of experience in the Asset Finance industry, most recently as director and CEO of ING Lease (UK) Ltd. He is a founding governor of The Leasing Foundation and was a director of Finance and Leasing Association Ltd. from 2003 to 2012 and a former Chairman of their Asset Finance Division. Previously, Chris was Head of Abbey Business responsible for five business units focused on the SME market. Prior to this, Chris was the Managing Director of Lombard Sales Finance where he spent 21 years.

 

Cathy Turner - Independent Non-Executive Director

Cathy is an Independent Non-Executive director and chairs the Remuneration Committee. She was appointed to the Board in May 2014. She is currently Non-Executive Director and Chair of the Remuneration Committee of Countrywide plc. She is also a Vice President of UNICEF UK and a member of the board of the Royal College of Art and the Institute of Financial Services. She is also an Associate of the advisory group Manchester Square Partners. Cathy has extensive industry experience working with Deloitte & Touche, Ernst & Young and Watson Wyatt as a compensation and benefits consultant in her early career. She subsequently joined Barclays PLC, where she was a member of the Group Executive Committee with responsibility for Human Resources, Corporate Affairs, Strategy and Brand and Marketing. During her time with Barclays she was also Director, Investor Relations for four years and had extensive experience in remuneration in her many roles. Most recently, she was Chief Administrative Officer of Lloyds Banking Group PLC. Cathy is a graduate of the University of Lancaster.

 

Pre-IPO reorganisation

Immediately prior to Admission, the Company's share capital will be reorganised. The reorganisation will result in the Company having a single class of ordinary shares.

 

DISCLAIMERS

The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, have been approved by Deutsche Bank AG, London Branch solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000, as amended.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

Neither this announcement, the publication in which it is contained nor any copy of it may be made or transmitted into the United States of America (including its territories or possessions, any state of the United States of America and the District of Columbia) (the "United States"). The securities referred to herein have not been and will not be registered under the applicable securities laws of the United States and, subject to certain exceptions, may not be offered or sold within the United States. There will be no public offering of such securities in the United States.

This announcement is not for publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Japan, South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, Australia, Canada, Japan or South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

This announcement is only addressed to and directed at persons in member states of the European Economic Area ("EEA") who are qualified investors ("Qualified Investors") within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71 /EC and amendments thereto, including Directive 2010/73/EU, to the extent implemented in the Relevant Member State of the EEA) and any implementing measure in each Relevant Member State of the EEA (the "Prospectus Directive"). Any investment or investment activity to which this announcement relates is available only to and will only be engaged in with such persons.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect Aldermore group's (the "Group") current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. 

Each of Deutsche Bank AG, London Branch, Credit Suisse Securities (Europe) Limited, Nomura International plc and Numis Securities Limited and their respective affiliates (together, the "Banks") and the Group expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

Any purchase of Shares in the proposed IPO should be made solely on the basis of the information contained in the final Prospectus. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change. This announcement has not been approved by any competent regulatory authority.

The IPO timetable, including the date of Admission, may be influenced by a range of circumstances such as market conditions. There is no guarantee that Admission will occur and you should not base your financial decisions on the Company's intentions in relation to Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all or part of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the IPO. The value of Shares can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the IPO for the person concerned. Past performance cannot be relied upon as a guide to future performance.

Credit Suisse Securities (Europe) Limited, which is authorised by the PRA and regulated by the FCA and the PRA, Deutsche Bank AG, London Branch, which is authorised under German Banking Law (competent authority: BaFIN - Federal Financial Supervisory Authority) and further authorised by the PRA and subject to limited regulation by the FCA and PRA, Nomura International plc, which is authorised by the PRA and regulated by the FCA and the PRA, and Numis Securities Limited, which is authorised and regulated by the FCA, are each acting exclusively for the Company and no one else in connection with the IPO. They will not regard any other person as their respective clients in relation to the IPO and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the IPO, the contents of this announcement or any transaction, arrangement or other matter referred to herein. Lazard, which is authorised and regulated by the Financial Conduct Authority, is acting exclusively for the Company and AnaCap and no one else in connection with the IPO and will not regard any other persons as its client in relation to the IPO and will not be responsible to anyone other than the Company and AnaCap for providing the protections afforded to its clients or for giving advice in relation to the transaction or the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the IPO, each of the Banks and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Shares and other securities of the Company or related investments in connection with the IPO or otherwise. Accordingly, references in the Prospectus, once published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by any of the Banks and any of their affiliates acting as investors for their own accounts. In addition, certain of the Banks or their affiliates may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of Shares. None of the Banks intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

None of Banks or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of, the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the IPO, Credit Suisse Securities (Europe) Limited as Stabilising Manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other transactions with a view to supporting the market price of the Shares at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilisation, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the price at which each Share is to be issued or sold under the IPO (the "Offer Price"). Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the IPO.

In connection with the IPO, the Stabilising Manager may, for stabilisation purposes, over-allot Shares up to a maximum of 15% of the total number of Shares comprised in the IPO. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilising period, AnaCap will grant to it the Over-allotment Option, pursuant to which the Stabilising Manager may purchase or procure purchasers for additional Shares up to a maximum of 15% of the total number of Shares comprised in the IPO (the "Over-allotment Shares") at the Offer Price. The Over-allotment Option will be exercisable once or more than once in whole or in part, upon notice by the Stabilising Manager, on or before the 30th calendar day after the commencement of conditional dealings of the Shares on the London Stock Exchange. Any Over-allotment Shares made available pursuant to the Over-allotment Option will rank pari passu in all respects with the Shares, including for all dividends and other distributions declared, made or paid on the Shares, will be purchased on the same terms and conditions as the Shares being issued or sold in the IPO and will form a single class for all purposes with the other Shares.

Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

 


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